Scope and Definitions:

This new regulation affects short-term rentals of residential properties in Turkey for tourism purposes. Rentals that are contracted for under 100 days and are in "residential" multi-use buildings are covered by the regulation. Rentals over 100 days in a single contract are exempt.

The regulation applies to:

• General principles for tourism rentals under 100 days
• Permit requirements
• Administrative fines and penalties
• Laws applicable to permitted tourism rentals

Tourism Rental: Renting a residential property to real persons or legal entities for any purpose for up to 100 days.

Tourism Rental Permit: The Ministry of Culture and Tourism issues a permit that allows property owners to exercise their rights to rent for up to 100 days.

Permit Holder: The person who is issued a rental permit in their name and rents out the property.

Landlord: The real or legal person who owns the property or holds rights to it through usufruct or building rights and rents it out.

Tenant: The real or legal person who enters into a tourism rental contract with the landlord.

Rental Permit Requirements:

To engage in tourism rentals under 100 days, a permit from the Ministry of Culture and Tourism must be obtained before entering into any rental contracts. The permit requirements are as follows:

• Unanimous approval from all owners of the building is required with the permit application. For complexes with multiple buildings, approval is only required from the owners of the building with the rental unit.
• In buildings with over 3 units, no more than 25% of units can be permitted for each owner.
• An owner cannot have rental permits for more than five units in the same building. If applying for more than 5, a business license and unanimous building owner approval must also be submitted.
• The permit obligation lies with the landlord renting out the property. Rentals handled by third parties, like agents, can only be done through Group A agencies licensed under the Travel Agencies Law.
• If the permit holder dies or a corporate permit holder ceases to exist, the permit expires after three months if not transferred to heirs or a new owner.
• Renting permitted units to third parties or using a rented residence permit for tourism rentals is prohibited. Exception for legal entities renting for their personnel.

Permitholder Responsibilities:

Permit holders renting out properties for tourism purposes have certain responsibilities they must comply with:

• Displaying the permit plaque provided by the Ministry of Culture and Tourism at the entrance to the rental unit.
• Complying with reporting requirements under the Identity Reporting Law. The permit holder is considered the responsible party for reporting tenants.
• Advertisements, social media, websites, etc. for permitted rentals cannot be misleading about the property's location, features, or promised conditions.
• The rental unit must be handed over to the tenant per the rental contract.
• Payments received must be refunded if the unit is not handed over properly.
• Changes in ownership through inheritance or legal transactions must be reported within 30 days.
• Proof of payment of the tourism tax under the Turkish Tourism Promotion and Development Agency Law must be submitted within the designated timeframe.

Platform Responsibilities:

Online platforms enabling tourism rentals have certain responsibilities under the regulation:

• You cannot advertise or enable the rental of units without a valid rental permit.

• Must comply with orders to remove content or block access to listings violating the regulation. Non-compliance can result in fines.
• Considered intermediary service providers under the E-Commerce Law. Subject to fines for each unpermitted listing enabled.
• Must remove or disable access to content or listings based on orders from criminal judges. Can appeal removal orders.

Enforcement and Penalties:

The regulation includes significant administrative fines and penalties for non-compliance.

• Fines of 100,000 TRY for renting without a permit, unauthorized subletting, and acting as a broker without a permit.
• A fine of 500,000 TRY for continuing unpermitted rentals after the initial fine. Platforms will be fined 100,000 TRY per listing enabled without a permit.
• False advertising fines up to 100,000 TRY. Up to 500,000 TRY for not providing contracted services.
• Failure to display the permit plaque results in a 100,000 TRY fine and an order to display. Continued non-display results in a 500,000 TRY fine.
• Fines of 1,000,000 TRY for persisting unpermitted rentals after fines and orders. Also for excessive contracts over 100 days.
• A permit can be revoked for violations, public order issues, or failure to remedy problems. Bookings protected.
• The Ministry of Culture and Tourism has inspection authority and the power to impose fines.

Tax Implications of Short-Term Rents:

• Income generated from daily or weekly rentals of your property is considered commercial income, not rental income, for income tax purposes. You can deduct depreciation expenses for fixtures as per the Tax Procedure Law.
• The 20% VAT rate applies to daily or weekly accommodation services provided in your property, as they don't qualify as "hotel" services subject to the 10% rate.
• You must keep a daily register of all guests and issue invoices within seven days of providing the accommodation service. 
• You can deduct depreciation on equipment and fixtures used in the business based on useful life, as specified in the relevant General Communiqués of the Tax Procedure Law.

Next Steps for Compliance:

For landlords currently engaged in short-term rentals in Turkey, here are some recommended next steps to comply with the new regulation:

• Existing rentals must apply for a permit within one month of the regulation taking effect. Rentals without permits after three months will be prohibited.
• Limit the number of permitted units per building according to caps. Adjust the business model if necessary.
• Display the permit plaque prominently once it is obtained. Inform online platforms.
• Consider working with licensed Group A travel agencies if unable to directly meet permit obligations.

Info credit: Serdar Tasdoken